Tory Tensions Flare as Brexit Moderates Push Customs Compromise

(Bloomberg) -- Conservative tensions over Brexit erupted again on Sunday as a senior U.K. minister fueled speculation that Theresa May may be planning to revive a customs plan rejected by euroskeptic members of the government last week.

The prime minister was outnumbered at a meeting of her inner cabinet on May 2 as pro-Brexit ministers demanded a clean break from the European Union customs regime, dismissing her plea for a compromise solution. It appeared to leave May facing a possible choice between staying in the customs union or leaving without a deal. Either could see rebels the Conservative Party destroy her government.

But in a BBC interview, Business Secretary Greg Clark said that the so-called customs partnership plan floated by May remained “on the table,” and that ministers had a “much more professional, collegiate discussion” than had been suggested. His comments came amid reports that May is planning to present a tweaked version this week and urge previously skeptical ministers to back it.

Locking ministers in a room may be the answer to May's customs headache.

Under a customs partnership, the U.K. would collect tariffs on behalf of the EU and then refund exempt businesses. Supporters say the plan would keep trade flowing and resolve the Northern Ireland border issue, but Brexit hardliners fear May will tie the U.K. too closely to the EU.

Clark disclosed that he spoke to Toyota Motor Corp. officials in the U.K. last week as he raised concerns that thousands of jobs could be at risk unless trade “frictions” are kept to a minimum after Britain leaves the EU. He also suggested that a customs transition period with the EU could be extended, as it may take until 2023 to put new customs infrastructure in place.

His comments were praised by former Home Secretary Amber Rudd, who said on Twitter that Clark was backing a Brexit that “protects existing jobs and future investment.” Carolyn Fairbairn, director general of the Confederation of British Industry, also issued a supportive statement.

But Jacob Rees-Mogg, who issued a thinly veiled warning last week that his euroskeptic group of lawmakers could pull its support from May, revived the slogan used before the 2016 referendum to attack the campaign for staying in the EU.

“This Project Fear has been so thoroughly discredited that you would have thought it would have come to an end by now,” he said on ITV's “Peston on Sunday” show. “We trade successfully all over the world. The delays on goods coming into Southampton are tiny.”

Writing in the Sun on Sunday newspaper, days after a stronger-than-predicted Conservative performance in local-council elections, May declared her “absolute determination” to make a success of Brexit.

To contact the reporter on this story: Andrew Atkinson in London at a.atkinson@bloomberg.net.

To contact the editors responsible for this story: Fergal O'Brien at fobrien@bloomberg.net, Ros Krasny, Molly Schuetz

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